College land has its ups and downs. This past week, St. Joseph’s College in Indiana announced it would close. Other small, tuition-driven colleges are having a hard time keeping the lights on.
But then there are the colleges who have ambitious plans for growth. Lehigh University has announced plans to add numerous buildings to its campus. It will build enough new residential halls to accommodate a 20% increase in its student population, along with a new life sciences laboratory building and a health technology building. In uncertain times, Lehigh is making a big bet in its future, that students who want to get into a great college will continue to land on Lehigh. Read more here about the Lehigh growth plan.
What does this mean for those who are looking for colleges? Well, if you’re looking at small colleges, you really need to think about solvency. Then again, for schools like Lehigh, we might want to look at how much debt even a relatively solvent university is taking on in order to grow. Some universities have a very conservative growth policy, while others resort to the financial markets in order to raise capital.
It’s not clear from the Washington Post article whether Lehigh plans to raise all the funds for its new building through fundraising, or whether the leadership plans to borrow–with the idea that “if we build it, they will come.” Lehigh’s application numbers and selectivity may signal that the capital markets will be willing to lend the university some money. I’ve learned from deans of admission that a college’s bond rating is closely tied to its ranking in US News and World Report. Still, it will be important to watch this growth spurt at Lehigh to ensure that its financial health remains secure.
Educational Consultant and Admissions Expert